World-Class Mining Stock: UK’s Rio Tinto (RTP)

We’re excited to offer you an opportunity to profit from a select group of low-priced stocks with immense short-term profit potential. These low-priced stocks, beaten down by the market at year-end, are likely to soar in January! The short-term, double-digit profits from past years’ reports include:

We expect that investments in this year’s 10 low-priced stocks will be just as rewarding.

Don’t delay. Remember, this small window of opportunity can mean huge short-term returns, and as a Cabot Wealth Advisory reader, you’re entitled to a special rate of just $24.95 but you must reply by December 14, 2007.

It’s an interesting time to be a political animal living in New Hampshire. It gets interesting every four years when the presidential primary juggernaut chugs into view.

Of course this year the juggernaut isn’t chugging. With state after state trying to grab a little bit of political leverage for its issues (and a little piece of the campaign funding pie, too), this year’s primary will be earlier than ever. New Hampshire’s statutes require that its primary be held before any other state’s, so every state that’s tried to move closer to the front of the line has just pushed New Hampshire’s primary earlier and earlier. The calendar is now set, and I’ll be voting on Tuesday, January 8.

The result of all this schedule jostling is that the nominating process for both parties will be pretty much over on Super Tuesday, February 5. That day will feature primaries in 20 states, including delegate-rich New York and California, and it will take an unlikely split in voting patterns to keep more than two candidates per party in the running. The odds favor at least one of the party’s nominations being sewn up when the dust settles. But it will still be New Hampshire that decides the early fortunes of the candidate crew.

It’s certainly natural for lots of states to want to be seeking some influence and policy input by pushing its primary date up. It’s also natural that lots of Americans resent the attention (and the economic benefits) that New Hampshire gains from its first-in-the-nation primary. (Iowa squeezes ahead of N.H. on the technicality that its delegate-selection event is a caucus, not a primary.) And finally, lots of people wonder whether it’s a good idea for a small state that’s nowhere near the national average in its ethnic, racial or economic composition to be taking the first crack at picking our national parties’ candidates.

As a long-time New Hampshire resident and a keen observer of the political process, I think my state is actually a great place for a first primary and does the nation a huge service by doing so. Here’s why.

Running for president in New Hampshire is done on a retail level. New Hampshire has one statewide newspaper (The Manchester Union Leader) and one regional TV station, both of which are considered to be part of the state’s conservative establishment. You can’t really use them to reach the independents and Democrats of the state, nor even many of its Republicans.

All serious candidates buy time on the big Boston stations to reach voters in the populous southern tier of the state, but that doesn’t cut the mustard in The Granite State. New Hampshirites demand (and get) time to talk to presidential aspirants, look them in the eye and ask them questions about what’s on their mind. There aren’t that many people in New Hampshire, and candidates know that every vote is worth fighting for. So they do.

New Hampshire is small.

This is really the big fact behind the two reasons I’ve given above. Someone who wants to run for president can come to New Hampshire a few years ahead of time and get to know the party leaders of the entire state. I’ve talked with candidates who drove around the state for weeks at a time (it’s less then 200 miles, north to south, and less than 70 miles east to west) and talked to whoever would listen (the entire state has fewer people than the cities of San Diego, CA or San Antonio, TX). And if people liked them, they’d read their flyers and introduce them to their friends.

We New Hampshire voters take our jobs very seriously. New Hampshire voters get to know their candidates by listening to them in Elks, Moose and VFW Halls and high school gymnasiums. We meet them in coffee shops and diners and on the streets outside factories and malls. We take our responsibility to the nation seriously, and don’t very often get fooled by promises and clichés. If we are going to demand that politicos stand out in the snow and meet people, we have to be willing to go out into that same snow to do the meeting. And we do.

New Hampshire voters are famous for delivering surprises. We look behind the polls and challenge the common wisdom. And when we like what we see, we deliver a message to the rest of the country that the surprised candidate is (or isn’t) the genuine object.

So, that’s the case for New Hampshire as I see it. Maybe we don’t have a big population of minorities or immigrants, but we take individual rights seriously and have the Civil War monuments and graveyards to prove it. Perhaps we’re a little more conservative than some states outside of New England (although that’s changing rapidly as newcomers flock to the south of New Hampshire to take advantage of our lack of both a sales tax and an income tax), but it’s a kind of conservatism that roots for underdogs and mistrusts authority – the state motto is Live Free or Die, and there’s a little bite left in it.

Eventually, the economics and ideology of bigger states will probably strip New Hampshire of its special place in the nominating process. But the downside will be a transition to wholesale, media-based campaigns that will allow candidates to court huge populations of voters with radio, TV and direct mail campaigns. There won’t be a small group of dedicated political junkies looking candidates in the eye and testing their handshakes and asking the toughest questions they can think of. And something will be lost.

You may be asking what does all this political talk have to do with investing? Not much, really. But when I first moved to New Hampshire back in the late 70s, when the cows still outnumbered the people (true!), I was deeply skeptical about the influence that my granite-headed neighbors had over the selection of our national leaders. Since then, I’ve come around, and I just wanted to get my opinion out there.

—–

I’ve been a huge fan of the movies for as long as I can remember, everything from Citizen Kane and Casablanca to Pulp Fiction and Run, Lola, Run. Every year at Thanksgiving I give thanks for the Internet Movie Database (with its information on 1,028,428 movies and millions of movie people) and for DVDs that come in the mail. Life is good.

But I have a particular movie in mind today, one that has haunted me (in a good way) ever since I last saw it on a chewed-up VHS rental tape back in the 80s. The movie is called Gizmo!, and it’s a documentary made in 1977 about the weird inventions that people have come up with over the years and strange things they have learned to do. I still think it’s one of the best “films for the whole family” ever made.

It came to mind again today when I saw in the New York Times that a small group of daredevils (I was going to say loonies, but thought better of it) is trying to make a flying suit that will allow them to sail like flying squirrels and land without a parachute. These suits are made of nylon cloth that stretches between the legs and under the arms, just like the cartoons you see of people about to jump off of garages.

A fair amount of Gizmo! is devoted to early attempts to fly, and several of the inventors shown are using suits that superficially resemble the flying suits in today’s NYT story. And if I’m not mistaken, one of the unsuccessful trials shown was an early parachute pioneer’s fatal 1912 plummet off the Eiffel Tower. All of this failure sets you up for the final, triumphant sequence in the movie that shows people in hang gliders actually living out the dream of soaring like birds. It’s a feel-good moment, and my bet is that the movie will be just as satisfying today as it was in the 80s.

But just to bring this piece back to an investment focus, part of the story of Gizmo! is that sometimes dreams have to wait until the materials come along to make them possible. People had been dreaming of and designing computers for hundreds of years before transistors actually made them practical. The same is true of getting energy from the sun, which had to wait for materials scientists to discover the photoelectric properties of doped silicon, and CD/DVD players, which use lasers to read and write information that let us store, watch and listen to our favorite movies and music when and where we want.

And if you’re trying to build an entire country, the materials you need might just be prosaic steel and copper, and that brings me to my investment idea for the day. The company is Rio Tinto (RTP), the U.K. mining giant that sells billions of dollars worth of iron ore, copper, aluminum and other minerals every year. The company is growing fast because of demand from China and the rest of the developing world, and that growth is having some unexpected consequences.

The first is that Rio Tinto, which has been a buy-and-hold-and-bank-the-dividend stock, is now growing fast enough to put its stock into a recent Cabot Top Ten Report. Part of this growth has happened because the value of the mineral resources that the company already owns keeps on rising.

But part of the stock’s advance is also the result of a proposed takeover bid by Australian mining behemoth BHP Billiton, which offered $130 billion for Rio Tinto. Rio Tinto, for its part, told BHP to take a hike, but the takeover spirit is in the air, and even a company as big as Rio Tinto (market cap $117 billion) isn’t immune.

Investors smell blood in the water, and they may be bidding RTP up in anticipation of a takeover premium. But the stock has been rising on huge demand and positive fundamentals for quite a while, and may not need the added fuel of M&A activity to keep going.

RTP is one of the stocks that showed up for the first time in a recent issue of Cabot Top Ten, which reviews and dissects the ten hottest stocks of the previous week. For investors who enjoy doing their own research and want to find the monster stocks of tomorrow before the market does, Top Ten is an indispensable aid.

You can check it out and try a no-risk trial subscription by clicking on the link right here.

Editors Note: Paul Goodwin is the editor of Cabot China & Emerging Markets Report. Rated #1 Top Performing Newsletter over the last 12 Months by The Hulbert Financial Digest.

The emerging markets have outperformed the markets of the developed world over the past few years, and China is the clear leader in economic growth. But it’s not the only player. The Cabot China & Emerging Markets Report focuses on the BRIC countries (Brazil, Russia, India and China) and seeks out the stocks with the best stories, the soundest fundamentals and the hottest charts. It was the top-rated investment newsletter for 2006 and has held onto that lead since. If you’d like a dependable guide to investing in these intriguing markets, you should consider a no-risk subscription. Click below to get started.

Cabot Wealth Advisories

We designed Cabot Prime for dedicated investors like you—investors who want to own the best stocks, collect the biggest profits, and lock in a rising source of income for life. With Prime membership, you get full access to nine of our top advisories and many members-only benefits, including free admission to our annual Investors Summit.

Cabot Benjamin Graham Value Investor uses the methods developed by the father of value investing, Benjamin Graham, and popularized by Warren Buffet. A system that works well in all markets, it buys stocks when they're dirt cheap, and sells when they've reached full valuation, a process that takes two years for the average selection. What's important here is buying only when a stock's price is below its Maximum Buy Price, holding through thick and thin, regardless of the news or the action of the stock, and then selling when the stock reaches its Minimum Buy Price. These are great stocks to own if you're a conservative stock investor. Chief Analyst J. Royden Ward explains clearly how to build a portfolio of stocks that meet his strict requirements-plus every issue includes updated rankings on his "Top 275 Value Stocks," so you can check on other stocks you may own.

Cabot Dividend Investor focuses on preparing for retirement, recommending a solid range of income-generating stocks, preferred stocks, REITs, MLPs, closed end funds and utilities, with particular emphasis on risk, dividend safety and dividend growth. If you’re retired or thinking about retirement, this advisory is designed for you. Cabot Dividend Investor’s proprietary Individual Retirement Income System (IRIS) will help you allocate your assets for capital appreciation, current income, growth and future income investments according to your retirement goals.

Cabot Emerging Markets Investor focuses on the emerging markets economies, with special attention paid to the BRIC (Brazil, Russia, India and China) investment landscape. You'll discover the value of international diversification and the profit potential of investing in countries whose economies are growing far faster than that of the U.S. All these stocks are traded on U.S. exchanges, usually as American Depositary Receipts. Under the guidance of Chief Analyst Paul Goodwin, Cabot Emerging Markets Investor was recognized as the top investment newsletter in 2006 and 2007 by Hulbert Financial Digest, and was rated by Hulbert as one of the top investment newsletters in every five-year period 2004 to 2011.

This flagship investment advisory has been published since 1970 and it is recommended for all investors seeking to grow their wealth. You’ll receive invaluable investing lessons, so that you won’t just become a more successful investor—you’ll become a wiser investor!

Cabot Options Trader’s Chief Analyst and options expert Jacob Mintz uses calls, puts and covered calls to guide investors to quick profits while always controlling risk. Beginners and experts alike can benefit from following Jacob’s advice. Whenever Jacob determines the time is right, he sends specific option buy and sell alerts via email and text-message for immediate action. He also sends out a weekly update with his views on the options market, open option positions and his outlook for the coming week.

Cabot Options Trader Pro’s Chief Analyst and options expert Jacob Mintz uses the full spectrum of option strategies to recommend the option that best suits the trade opportunity—calls, puts, spreads, straddles, iron condors and more—while always controlling risk. Whenever Jacob determines the time is right, he sends specific option buy and sell alerts via email and text-message for immediate action. He also sends out a weekly update with his views on the options market, open option positions and his outlook for the coming week.

Cabot Small-Cap Confidential is a limited-circulation advisory for investors seeking profit opportunities in high-potential small company stocks. Each month, small-cap expert and Chief Analyst Tyler Laundon features in-depth research on one outstanding small-company stock that is a pioneer in its field and undiscovered by institutional analysts. Updates on all recommended stocks are sent weekly. The circulation of Cabot Small-Cap Confidential is strictly limited because the stocks recommended are often low-priced and thinly traded. In the publication’s first five years, spanning 2007-2012, the average stock recommendation gained 30.5%.

Cabot Stock of the Week offers the very best of all Cabot stocks across the investing spectrum. Each stock is personally selected by Cabot’s President and most Senior Analyst Timothy Lutts, and guided by the collective wisdom of all the Cabot expert analysts. As a subscriber of Cabot Stock of the Week, you’ll build your wealth and reduce your risk with the single best stock each week for current market conditions among growth, momentum, emerging markets, value, dividend and small-cap stocks.

Designed for experienced investors, Cabot Top Ten Trader is your ticket to fast profits in stocks that are under accumulation now. Every Monday you’ll receive a one-page profile of each recommended stock, including fundamental analysis, technical analysis and buy ranges. Plus... each Friday, Chief Analyst Michael Cintolo will give you an update titled "Movers & Shakers," so you’ll always know his latest thoughts on these fast-moving stocks. Cabot Top Ten Trader is your best source of advice on investing in the market’s hottest stocks.

Yes, you can have Growth AND Value! Combining both growth and value in her growth-at-a-reasonable price strategy, Chief Analyst Crista Huff uncovers stocks with strong growth catalysts that are selling at attractive valuations—the stocks that are temporarily overlooked by mainstream analysts and institutions. Crista applies her stringent screens to deliver the best stocks in three portfolios: Growth, Growth & Income, and Buy Low Opportunities. A subscription includes monthly issues with weekly updates, special bulletins with market and stock alerts and email access to Crista.

Wall Street’s Best Dividend Stocks presents the best income investments from the top Wall Street analysts, researchers and advisors. Editor Nancy Zambell scours more than 200 advisories and research reports to select the top recommendations. Dividend recommendations include high yield, growth and income, REITs, mutual funds, ETFs and more. One Spotlight Stock is featured each month, along with Nancy’s insight on the market and updates on past recommendations. One top recommendation arrives in your email box each morning, and then gets collected into an easy-to-read digest of 30 to 35 top recommendations each month.

Editor Nancy Zambell scours more than 200 advisories and research reports to select the top recommendations by the top analysts. Selections run the full range of opportunities: growth stocks, value stocks, technology, small-caps, biotech, pharmaceuticals, mutual funds, ETFs and more. One Spotlight Stock is featured each month, along with Nancy’s insight on the market and updates on past recommendations. Thirty-plus recommendations are delivered to you in Daily Alerts directly to your email box, and collected in an easy to read digest each month.

Reviews

“Dear Mr. Goodwin, Mr. Cintolo and Mr. Lutts,
I cannot express how favorably impressed I am by your:
1) Unbiased and honest views of the stock market; you have proven that honesty is still a valid word
2) Unparalleled experience in both technical and fundamental analysis of the stock market
3) Your unequaled care for your subscribers
I am writing this today because I think you should know that subscribers "feel" the difference between you guys and other so called "up & up" fancy expensive market letters. I have lost a bundle subscribing with them and they did not deliver the goods. They have a lot to learn from you people and I also commend you on the Outstanding Professionalism that is synonymous with the Cabot name. Believe me these are not compliments, these are facts, and I have never, until today, written a thank you letter such as this one.Suffice it to say that you already saved me a bundle of money by saying it "like it is" and steered me away from the pundits (bandits?) and the empty taking heads. Dear sirs, you have in me a subscriber for life. Best regards to all.”

-J. Der Mesropian, Fulton, New York

Market Update

From Cabot Dividend Investor

The market continues to lean bullish, with warning signs. While the Dow has been hitting all-time highs, the S&P has gone nowhere for two weeks and the Nasdaq has actually lost ground. Investors seem to be deserting “risk-on” assets, leading to underperformance in the Russell 2000 (IWM) and high-growth sectors including Semiconductors (SMH) and Biotechs (XBI).

On an individual stock level, earnings reactions have been leaning negative. Companies that disappoint are punished severely, while companies that beat are rewarded weakly, if at all.

Meanwhile on the fixed income side, Friday’s hot payrolls report increased inflation expectations and drove bond yields higher over the weekend. But yesterday’s North Korea panic drove investors out of stocks and into conservative assets, driving bond yields lower once again. “Risk-off” classes, including utilities, benefited.